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Income Tax Appellate Tribunal, DELHI BENCH “SMC-2”: NEW DELHI
Before: SHRI P.K.BANSAL
O R D E R This is an appeal filed by the Revenue. Admittedly the tax effect in this appeal by the Revenue is less than Rs.10 lakhs. 1.1. In terms of CBDT Circular No.21/2015 dated 10th December,2015, F.No. 279/Misc./142/2007-ITJ(Pt.) read with S.268 A of the Income Tax Act 1961, this appeal by the Revenue should have been withdrawn or should not have been pressed by the Revenue.
In view of the above this appeal by the Revenue is dismissed in limine. CO No. 234/Del/15 3. Now coming to the CO filed by the assesee is concerned I noted that the Ld. CIT(A) has sustained the disallowance u/s 49 Rule 8D out of the disallowance amounting to Rs. 78,628/- out of the disallowance made by the AO at Rs. 19,35,470/-. I noted that the said disallowance has been sustained by the Ld. CIT(A) by taking the half percentage of the average value of the investment amounting to Rs. 1,05,59,783/-. Ld. DR before me vehemently contended that in view of the decision of the Jurisdictional High Court in the case of Maxopp Investment Ltd. vs. CIT (2012) 247 CTR (Delhi) 162 and that of Mumbai Bench in the case of Rainy Investment Pvt. Ltd. vs. ACIT and the said decisions of this Tribunal as well as the Chennai Bench of the Tribunal the share application money can not be regarded as an investment in shares or an asset yielding tax free income and neither it is capable of yielding any tax free income. Therefore it cannot be treated as part of the total assets for computing disallowance u/s 14A .
I noted from the order of the Ld. CIT(A) page 7 that the CIT(A) while computing the average value of the investment at Rs. 1,05,59,783/- under Rule 8D under clause B has already reduced out of the total investment of Rs. 24,10,08,238/- share application money amounting to Rs. 23,02,33,300/-. In view of this facts the ground taken by the assessee does not have any leg to stand. I therefore dismiss the ground taken by the assessee.
In the result the appeal of the revenue as well as cross objection filed by the assesee stand dismissed.
Order pronounced in the open court on 14/07/2016.